Finding and Dealing with Contractors in Burlington
One of the most vital aspects of owning rental property is having strong connections with contractors who can handle any project you may have in a timely and professional manner. Having the ability to get the job done right the first time will save you money and make your tenants very happy. However, dealing with contractors is just one more huge responsibility you as a landlord need to have perfected. If you already have contractors that you know and trust, that is great! But for those of you who don't, and are not sure where to begin, here are some tips and concerns you need to keep in mind.
The ideal contractor is someone who will fix the problem the right way, the first time, and in a cost effective manner. When you have a project you need completed, it is always a good idea to get at least three bids from different companies. Once you have all three bids in hand, compare and contrast the services and prices offered. It is not always the best idea to go with the cheapest option. For example if two of your bids are around $500 and the other one is only $250, ask yourself: why? Maybe after looking a little closer you will realize that two of the contractors are planning for the job to take 4 hours while the other is planning for 2 hours. Again, you want there to be a perfect mix of price and service. You should also interview all the contractors to figure out what experience they bring to the table.
Some questions you should ask every contractor are:
- Do you have proper insurance? (If they don't, they are automatically out of the running.)
- Can you itemize your bid? (You want to know where your money is going. Having all bids itemized also makes comparing different bids much easier.)
- Is your bid an estimate or a fixed price? (Some contractors create their bid based on estimates and your final bill could end up being more in the long run. Make sure to request a fixed price estimate so you know exactly how much you will be spending.)
- How long have you been in business and what is your experience?
Ask for references. When the contractor supplies you with a list of references, CALL THEM. Pick up the phone and start asking some more questions:
- What was your overall experience?
- Did the contractor stay in touch throughout the project?
- Where you pleased with their quality of work?
- Was the project completed in a timely manner?
- Did you feel comfortable with the company and the subcontractors they used?
- Would you use this contractor again? (Pay close attention to this last question and gauge the response. If you get a flustered and shaky response that is probably a good indicator that there were some concerns.)
Once you have hired a contractor and you know all there is to know about them and their experience, it is time for a little paperwork. Before a contractors begins a job you should get two things:
- A copy of their insurance policy, and
- A filled out W-9 that will be used to complete their 1099 tax form at the end of the year.
If a contractor is unwilling to provide you with this information, move on to the next contractor. Proof of insurance not only increases your comfort level but also protects you if you ever get audited. The W-9 form provides the contractor's name, mailing address, and E.I.N. or Social Security number. This information will then be transferred to the 1099 form at the end of the year. The 1099 is basically a W-2 for businesses. The IRS requires you to fill out a 1099 for any contractor you have paid more that $600 in a calendar year. If you don't, you could be looking at some pretty hefty fines.